At the start of the season a clearance war broke out between the VFL and the VFA, with both leagues accepting players from the other without a clearance from their original club.

The Demons, who had finished second and been knocked out of the finals in two games in 1937, served notice that they were going to be contenders with an upset victory of Geelong on their own ground but inconsistency cost them dearly as the year wore on.

Melbourne's form collapsed when the rains came and league grounds turned into mud pits. A three game losing streak from Round 10 to 12 was cancelled out by three straight wins, but the side then fell apart again and lost two of their last three games.

Having given themselves an outside chance by defeating top of the ladder Carlton in Round 17, the Demons were then thrown into a virtual Elimination Final against Collingwood in the last round they lost and finished a game outside the four.

On Wednesday 13 July a combined team made up of Melbourne and St Kilda players lost 7.19 to 16.13 against a travelling East Fremantle team. The combined side was captained by Melbourne's Bill Adams.

During the year Melbourne lobbied the league for a change in the out of bounds rule that would mean only kicks out on the full led to free kicks, rather than any ball which crossed the line.